The Democratic Republic of the Congo (DRC) is a country with a volatile history and topography that's tough to navigate. It's not the easiest place to live when you consider the risks that you are exposed to on a regular basis. These might include sickness, unemployment, and unexpected expenses, but also more specific and remarkable challenges, such as buffalos trampling your crops. Now consider that insurance is mostly inaccessible. How would you ensure that you and your family cope?

The people of the DRC have come up with an innovative and complex solution that is very well-suited to their specific needs, in the form of mutualitées. While community-based financial groups such as savings and credit associations or burial societies are seen in many countries in Africa, mutualitées are unique in their design. They are set apart from other co-operative groups by their complexity and broad activity span across different financial services and social functions. In many ways, mutualitées fulfil the role of insurers, investment managers, contractors of public works and public service providers. They manage to meet an entire portfolio of financial needs in one product.

Mutualitées started in the cosmopolitan city of Kinshasa. The coming together of different cultures and ethnicities created a need for groups to preserve and celebrate their heritage. Associations were set up and, over time, their goal evolved from cultural preservation to mutual self-help: supporting their kinsmen within an unfamiliar, and sometimes overwhelming, city, far from home. Marriages were celebrated, deaths were mourned, and assistance was given in times of hardship.

Nowadays, mutualitées are complex and organised social groups where the common bond is no longer limited to a shared ancestry, and the benefits are more than financial.

"The advantages (of a mutualitée) are love and mutual support. We give assistance in case of an illness. In a case of a birth we also assist. We provide support in case of bereavement."

Head of a mutualitée, Kinshasa

The members of a mutualitée convene regularly. At those meetings members contribute a certain sum, with which the management team (made up of highly-esteemed individuals) are charged with fulfilling the mutualitée's numerous aims. Examples range from a small mutualitée of young men that clears stagnant water in a certain suburb to combat malaria, to a large mutualitée that lobbies government in order to reunify the two Congos.

From interviews with members of mutualitées, it emerged that their overarching aim is to assist members in times of need. A common way to do this is via risk pooling or pooled savings. In certain cases of misfortune (such as death or illness) or celebration (such as marriage or childbirth), as the interviewee describes above, members are eligible for a pay-out. A specific amount is set for particular events, such as US$300 for a funeral or US$100 for childbirth. Members therefore know exactly what to expect.

Some mutualitées also assist members through individual savings and credit. The management will guard members' savings for them or, in exceptional cases, based on a member's merit, will provide them with a loan. Moreover, many mutualitées grow their funds by investing in assets. For instance, there's a student mutualitée that invests in fridges from which cold drinks are sold and another buys cars to run a taxi service.

There are also mutualitées that builds infrastructure and conduct activities to generate positive externalities. Examples range from mutualitées funding road improvements, to mutualitées that organise after-school activities for children, such as soccer tournaments.

Thus mutualitees therefore fulfil an important social as well as financial assistance role.

"Firstly, I am proud because I am in an association with my brothers. I lost my son and I did not have enough financial means and the President of the association assisted me with $200 for the coffin."

Staff member of a mutualitée, Kinshasa

So what does this mean for policymakers and regulators?

Given the early stages of retail financial market development in the DRC, where financial access barriers are wide-spread and only the top end of the market is served in the formal financial sector, the mutualitée provides a uniquely tailored, local solution to many. This creates a policy imperative to acknowledge and protect the role that the mutualitée plays in serving those outside the reach of the formal financial sector. It also poses the question of whether formalisation of these financial services is desirable and, if so, what would this formalisation look like. The implementation of the 2015 Insurance Act, which states that all providers of insurance, including mutual associations, are subject to new and stringent requirements relating to market entry and minimum capital criteria, may be the first warning light for the future of mutualitées. If strictly enforced, this would place most in jeopardy.

Should mutualitées come under threat, it will mean not only the loss of a broad-reaching financial services, but also a valuable social support network. So, whilst some will merely lament the cancellation of a local kids' soccer tournament, a greater hardship will come for those that have nowhere to turn when they need money for a hospital bill or worse, a funeral.

We encountered the phenomenon of mutualitées during our in-country research work for the Making Access Possible (MAP) study. MAP draws insights from both qualitative and quantitative, demand and supply-side research, with inputs from stakeholders in both the public and private sector. This feeds into a financial inclusion roadmap. The diagnostic for MAP DRC is forthcoming and will be released soon.

Jaco Weideman is a research associate at Cenfri and has been part of the team since November 2014. Since joining the team, Jaco has been involved in several projects in Mozambique and South Africa. Jaco has been part of the team conducing MAP diagnostics in Mozambique, Madagascar and DRC, responsible for FinScope data analysis, and segmentation to identifying potential target groups for financial services providers in the country. Renée Hunter is a research analyst working within i2i's Client Insights team. Her research to date has mostly focused on client centricity and data protection. Before joining i2i, Renée worked as a junior researcher at Cenfri, and before that as a junior business developer for Divitel - an independent video systems integrator.

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